Monthly Archives: January 2010

Top 10 Nordic Stocks

The technical analysts at presents an updated list of the top 10 Nordic stocks at the moment. Four of them are Swedish.

OMX Nasdaq Stockholm

According the Norwegian analysts this is the best Nordic investment opportunities in the months to come.

The list is created on basis of Investtech’s own technical analysis system and with a time frame between one and six months. (Medium Term).

Here’s the list:

1. Vostok Nafta, investment company, Sweden.

(“The share is testing support at SEK 32 and should signal a further rise. The price has fallen slightly, but an increase is indicated.”)

2. Alliance Oil Company, oil company, Sweden.

(“The share is in a rising trend and is testing support at SEK 110, this can lead to an upwards reaction.”)

3. DSV, transport, Denmark.

(“Rising trend, testing support at DKK 93.”)

4. Unibet Group, online gambling, Sweden.

(“Have met resistance at SEK 197 kroner, but are now signaling a rise to 220 or more.”)

5. New Wave Group, branding, Sweden.

6. Frontline, shipping, Norway.

7. Aker, industrial conglomerate, Norway.

8. Konecranes, industry supplier, Finland.

9.Outotec, mineral- and metal techniques, Finland.

10. RCCL, ship cruise, Norway.

The Nordic Markets:

Oslo Stock Exchange

Nasdaq OMX Stockholm

Nasdaq OMX Copenhagen

Nasdaq OMX Helsinki

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"The Houdini Recovery"

Gross domestic product grew at a 5.7 percent annual rate from October through December, more than anticipated and the strongest performance since the third quarter of 2003, figures from the Commerce Department Friday showed. But the amazing recovery in the U.S economic activity might also be the greatest illusion ever, and makes David Copperfield look like an amateur.

“It is hard to believe that productivity at this time is growing at a pace that is four times the historical norm.”

David Rosenberg

Consumer spending rose at a 2 percent pace after increasing 2.8 percent the previous three months, reflecting a slowdown in auto sales, Bloomberg News reports. Excluding autos, consumer spending increased at a 3 percent rate last quarter, the most in three years, indicating the biggest part of the economy was gaining speed.

“The increase is being fueled by growing incomes rather than a decrease in savings, signaling household purchases can keep expanding in coming months.”

Obviously, there are several ways to look av the GDP numbers. Here’s what chief economist David Rosenberg at Gluskin Sheff sees:

“First, the report was dominated by a huge inventory adjustment — not the onset of a new inventory cycle, but a transitory realignment of stocks to sales. Excluding the inventory contribution, GDP would have advanced at a much more tepid 2.2% QoQ annual rate, not really that much better than the soft 1.5% reading in the third quarter.”

“Second, it was a tad strange to have had inventories contribute half to the GDP tally, and at the same time see import growth cut in half last quarter. Normally, inventory adds are at least partly fuelled by purchases of foreign-made inputs. Not this time. Strip out inventories and the foreign trade sector, we see that domestic demand growth in the fourth quarter actually slowed to a paltry 1.7% annual rate from 2.3% in the third quarter.”

Recovery? What recovery?

Based on the economic simulations, demand growth with all the massive doses of fiscal and monetary stimulus should already be running in excess of a 10% annual rate.

So, the really interesting question is why it is that underlying demand conditions are still so benign more than two years after the greatest stimulus of all time.

“The answer is that this epic credit collapse is a pervasive drain on spending and very likely has another five years to play out”, David Rosenberg at Gluskin Sheff writes in a note to his clients.

“If you believe the GDP data — remember, there are more revisions to come — then you de facto must be of the view that productivity growth is soaring at over a 6% annual rate. No doubt productivity is rising — just look at the never-ending slate of layoff announcements. But we came off a cycle with no technological advance and no capital deepening, so it is hard to believe that productivity at this time is growing at a pace that is four times the historical norm. Sorry, but we’re not buyers of that view.”

“No matter how you slice it, the GDP numbers represented not just a rare but an unprecedented event, and as such, we are willing to treat the report with an entire saltshaker — a few grains won’t do.”

Here’s the full commentary from Mr. Rosenberg.

And here’s the other side of the coin – presented by Bloomberg News.

If you want to study the numbers for yourself, here’s the release from the U.S. authorities.

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U.S. GDP Grows Faster Than Expected

The U.S. economy grew at 5.7 percent annual rate in the fourth quarter, the highest rate of gross domestic product growth since 2003 and up from 2.2 percent in third quarter. The rise, which beats expectations, was driven by business inventories.

Gross domestic product, the broadest measure of economic activity, rose at a 5.7 percent annual rate in the fourth quarter, the Commerce Department said Friday. That is the highest pace of growth since 2003, and it constitutes strong proof that the recession reached its end earlier in 2009. It was also a surprisingly positive result, well above the 4.6 percent rate of GDP growth forecasters had expected.

But there remained reason to doubt how strong the economic recovery will be in 2010. The biggest component of the GDP growth was a steep drop in the pace at which businesses were cutting back on their inventories. Firms reduced their inventories by $33.5 billion in the fourth quarter, compared with $139 billion in the third. In the math of GDP, which attempts to capture the value of goods and services produced within U.S. borders, that added 3.4 percentage points to overall growth.

The down side is that inventories are unlikely to provide a similar boost to growth in future quarters. Now that companies are not cutting back on the goods on their warehouses and store shelves in large numbers, the way they were during the depths of the recession, inventories will not add much to growth in the coming quarters unless businesses decide they cut back too far during the downturn and decide to actively rebuild their inventories.

There was also a significant boost to growth from businesses investing again in equipment and software. They cut back dramatically on capital spending during the depths of the recession, and now such spending seems to be clawing back, rising at a 13.3 percent annual rate in the fourth quarter. That contributed 0.8 percentage points to overall growth.

American consumers also continued to increase their spending, at a 2 percent annual rate. Because personal consumption is the largest piece of overall economic activity, that was enough to add 1.4 percentage points to total GDP.

The Washington Post

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